HOUSEHOLD SETTLEMENT RESTITUTION CHECKS GOING OUT TO THOUSANDS OF MARYLAND CONSUMERS

$12.8 Million Mailed to Marylanders as Result of Landmark Settlement

Attorney General J. Joseph Curran, Jr. announced today that checks are being mailed this week to the 13,565 Maryland mortgage holders who are due restitution under the State's $12.8 million settlement with Household International. The consumer payment program stems from the landmark settlement, finalized in December 2002, between Household International and the attorneys general and banking regulators of all 50 states and the District of Columbia.

The settlement resolved an investigation by the states into allegations of unfair and deceptive mortgage lending practices by Household International, which is one of the nation's largest sub-prime mortgage lenders through its subsidiaries Household and Beneficial Finance. The states alleged that Household had overcharged borrowers with fees and interest, and had misled borrowers about other loan terms such as prepayment penalties and credit insurance.

Under the settlement, Household agreed to implement a series of reforms in its lending operations. Court injunctions in place in all 50 states restrict prepayment penalties on current and future home loans, prohibit loan "flipping," limit up-front points and origination fees, and improve loan disclosures. Household also agreed to pay $484 million dollars to the states to be distributed to eligible Household borrowers. The monetary settlement was the largest ever obtained by state attorneys general in a consumer protection case.

"I am very pleased to see the money on its way to the Maryland borrowers who were hurt by Household's practices," Attorney General Curran said.

"I am very satisfied with this outcome on behalf of the borrowers in Maryland," said DLLR's Commissioner of Financial Regulation Charles Turnbaugh. "Not only does it protect borrowers from the inappropriate fees charged by Household, it reimburses them for their unfair treatment."

Consumers who obtained a mortgage loan directly from Household from January 1999 through September 2002 and who filed claims forms will receive payments. The amount consumers will receive was determined by the specifics of their loan; the smallest award was $106.51 and the largest $11,299, with the average award being $944.53.

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